Even Karl Rove agrees that Republicans blundered on the payroll tax issue. They may be right “on principle and on policy“, as Charles Krauthammer puts it, but they’ve “lost the optics”, as Rove contends.
This has been a rare victory for the president due in large part to a divided GOP. “Republicans,” write the editors of the Wall Street Journal
have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he’s spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.
House Republicans yesterday voted down the Senate’s two-month extension of the two-percentage-point payroll tax holiday to 4.2% from 6.2%. They say the short extension makes no economic sense, but then neither does a one-year extension. No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year’s tax holiday has demonstrated. The entire exercise is political, but Republicans have thoroughly botched the politics.
Indeed. And as Ed Morrissey has pointed out, the payroll tax issue has helped the incumbent in public opinion polls:
In short, Obama has rebounded slightly in job approval, but has had no real change on the economy and job creation. His pursuit of the payroll tax cut extension has clearly helped him gain some middle-class credibility in the last six weeks, something Republicans should keep in mind, but we’re not looking at a major rebound as long as Obama remains as underwater on the economy as this poll shows.
Fascinating how Obama has achieved this rebound by co-opting a traditionally Republican issue, lower tax rates.
The real question is whether he can sustain the bounce. Given the president’s low numbers on the economy and job creation (that Morrissey) cites, that doesn’t seem likely. And are there other Republican issues the Democrat will be willing to co-opt should, as most predict, the economy remains sluggish?
Then also there’s the issue of depriving the Social Security system of its funding (which comes through the payroll tax). As Conn Carroll reports in the Washington Examiner:
After Senate Republicans split on Minority Leader Mitch McConnell’s, R-Ky., payroll bill, Politico reported: “The reality is that many conservatives hate the payroll tax cut — they think it’s a band aid approach and takes money away from Social Security.”
Can you imagine how Democrats would squawk had Republicans been the first to propose cutting the tax which funds this popular federal program? Still, Carroll doesn’t think this is a winning issue for Republicans:
But the Social Security objection makes zero sense politicaly or policy-wise. And yet, we have good conservatives like Sen. Jeff Sessions, R-Ala., and Rep. Jeff Flake, R-Ari., opposing the payroll rate cut because, “you’re draining the trust fund, you’re hastening the insolvency of Social Security.”
Whatever the case, the optics of this have not been good for the House GOP, but they have been great for the Democratic White House ever eager to promote a confrontation. All that said, the president got his bounce by co-opting a Republican issue.
He still has put forward no plans to address the burgeoning federal deficit — or to reform underfunded entitlements. Indeed, if anything, his latest tax plan makes both problems worse.